Alibaba Group has been fined a record CNY 18 billion (USD 2.75 billion) in China, after an anti-monopoly probe found the e-commerce giant had abused its dominant market position for several years, Reuters reports. The fine is equal to about 4 percent of Alibaba’s 2019 domestic revenues.
The State Administration for Market Regulation (SAMR) announced its antitrust probe into the company in December and Alibaba had said it was cooperating with the authorities.
The SAMR said it had determined that Alibaba had been abusing market dominance since 2015 by preventing merchants from using other online e-commerce platforms. The practice, which the SAMR has previously spelt out as illegal, violates China’s antimonopoly law by hindering the free circulation of goods and infringing on the business interests of merchants, the regulator added.
In addition to the fine, Alibaba was ordered to make "thorough rectifications" to strengthen internal compliance and protect consumer rights. Alibaba said in a statement that it accepts the penalty and "will ensure its compliance with determination".
Alibaba does not expect any material impact from changes to its exclusivity arrangements with merchants, CEO Daniel Zhang said in a conference call on the ruling. The company will introduce measures to lower entry barriers and business costs faced by merchants on its platforms, but remains confident in the government’s overall support of the company.
"They are affirming our business model," said Alibaba executive vice chairman Joe Tsai. "We feel comfortable that there’s nothing wrong with our fundamental business model as a platform company."
Tsai added the company "doesn’t rely on exclusivity" to retain its merchants, adding such exclusivity arrangements in the past only covered a small number of Tmall flagship stores.
